Technology Crushes Barriers to Innovation

The world’s fastest electric motorcycle — top speed 218 mph– was built at TechShop. So was President Obama’s iPad case, the prototypes for Square, the smartphone dongle that businesses can use to swipe credit cards and a host of other Kickstarter projects.

Mark Hatch, CEO of TechShop

TechShop is a national chain of membership-based do-it-yourself fabrication workshops that provide access to professional equipment and expert advice for a monthly fee.

“We are giving people access to the tools of the industrial revolution for the cost of a bad Starbuck’s addiction. They are changing the world as a result,” said TechShop CEO Mark Hatch. Hatch came to the company in 2007, a year after it was founded. Before that, the former green beret was president of GL Services, a business process outsourcer, and served in management roles at Avery Dennison and Kinko’s.

Recently, Hatch discussed the state of entrepreneurship and innovation in the current economy and why he thinks the cloud changes everything.

What shifts are you seeing the way people acquire technology?

I actually think that the biggest trends are sociological and demographic. They’re around how people are choosing to acquire things so they’re not being as acquisitive. What’s intriguing about that is, as a result, instead of just buying anything, they focus a lot of attention on the things that they do buy, and they imbue an enormous amount of value in that selection process. And so I think the value of the tools and how we perceive the tools and the value of the tools is fundamentally changing.

You see that in the cost of phones, computers and tablets, and how people are spending their money there. But we’re also seeing it translated into furniture, clothing and other areas where people are spending more time thinking about what it is they want and they appreciate the design side a lot higher, a lot more than they used to.

Is right now a good time to be an entrepreneur?

Technology is crushing the major barriers to innovation today. We’ve never lived at a time in history where somebody could come off the street and get access to the kinds of powerful tools [that can] launch a company in literally 7 days.

This could not have existed 10 years ago, and it’s primarily because of the cost of the tools and the cost of the software associated with it. And then there’s the ease of use of components, so on the tool cost side, numerically controlled computers required a $100,000 piece of software that took 6 months to get even moderately comfortable with. Today we’re buying that same machine for $17,500 and we’re teaching people how to use the software in two class sessions, so there’s a 90-some percent reduction in the cost of those tools.

The combination of hardware tools, cost, software and ease of use enables us today in a way that wouldn’t have existed 10 years ago.

What are the qualities that an entrepreneur needs?

The two most important are a passion and the ability to accept failure and move on. On the passion side, the difference between a passionate entrepreneur who’s pursuing a particular problem and one who’s just doing it so that they can make some money is huge. It’s like a 5x to 10x difference. And the other one is the fear of failure, which we seem to actually instill in our education system because you always check whatever you did wrong.

Do those barriers crushed by technology stoke entrepreneurial passion?

I think it’s always been there. It’s just that the cost associated with it was too high. For example, if you had a great idea for a safety light socket device, historically getting that made out of plastic and getting it to a trade show would have cost you $50,000 to $100,000 in development time and maybe 3 to 6 months of effort. We had somebody launch a company successfully last year who did all the development work for under $1,000 and is now on the shelf at Walmart.

So they launched a company for $1,000 instead of $50,000. As a result, what’s happened is that you’ve now enabled entrepreneurs to launch companies as part of their disposable income, rather than having to raise angel funds or other things. So now anybody can be an entrepreneur.

What does the cloud mean for innovation?

The ability to manipulate things in virtual space, down to the molecular level so that we can model something without having to risk hundreds of thousands of dollars in time and effort in building and steel, and to do that in a virtual environment literally changes everything. This speed of innovation, the quality of innovation [and] the depth of the innovation that we can do now [is] because of the cloud. The computing power that’s in the cloud far exceeds at multiple dimensions what we’ve ever had. It really does change everything.

The world’s fastest electric motorcycle — top speed 218 mph– was built at TechShop. So was President Obama’s iPad case, the prototypes for Square, the smartphone dongle that businesses can use to swipe credit cards and a host of other Kickstarter projects.

Mark Hatch, CEO of TechShop

TechShop is a national chain of membership-based do-it-yourself fabrication workshops that provide access to professional equipment and expert advice for a monthly fee.

“We are giving people access to the tools of the industrial revolution for the cost of a bad Starbuck’s addiction. They are changing the world as a result,” said TechShop CEO Mark Hatch. Hatch came to the company in 2007, a year after it was founded. Before that, the former green beret was president of GL Services, a business process outsourcer, and served in management roles at Avery Dennison and Kinko’s.

Recently, Hatch discussed the state of entrepreneurship and innovation in the current economy and why he thinks the cloud changes everything.

What shifts are you seeing the way people acquire technology?

I actually think that the biggest trends are sociological and demographic. They’re around how people are choosing to acquire things so they’re not being as acquisitive. What’s intriguing about that is, as a result, instead of just buying anything, they focus a lot of attention on the things that they do buy, and they imbue an enormous amount of value in that selection process. And so I think the value of the tools and how we perceive the tools and the value of the tools is fundamentally changing.

You see that in the cost of phones, computers and tablets, and how people are spending their money there. But we’re also seeing it translated into furniture, clothing and other areas where people are spending more time thinking about what it is they want and they appreciate the design side a lot higher, a lot more than they used to.

Is right now a good time to be an entrepreneur?

Technology is crushing the major barriers to innovation today. We’ve never lived at a time in history where somebody could come off the street and get access to the kinds of powerful tools [that can] launch a company in literally 7 days.

This could not have existed 10 years ago, and it’s primarily because of the cost of the tools and the cost of the software associated with it. And then there’s the ease of use of components, so on the tool cost side, numerically controlled computers required a $100,000 piece of software that took 6 months to get even moderately comfortable with. Today we’re buying that same machine for $17,500 and we’re teaching people how to use the software in two class sessions, so there’s a 90-some percent reduction in the cost of those tools.

The combination of hardware tools, cost, software and ease of use enables us today in a way that wouldn’t have existed 10 years ago.

What are the qualities that an entrepreneur needs?

The two most important are a passion and the ability to accept failure and move on. On the passion side, the difference between a passionate entrepreneur who’s pursuing a particular problem and one who’s just doing it so that they can make some money is huge. It’s like a 5x to 10x difference. And the other one is the fear of failure, which we seem to actually instill in our education system because you always check whatever you did wrong.

Do those barriers crushed by technology stoke entrepreneurial passion?

I think it’s always been there. It’s just that the cost associated with it was too high. For example, if you had a great idea for a safety light socket device, historically getting that made out of plastic and getting it to a trade show would have cost you $50,000 to $100,000 in development time and maybe 3 to 6 months of effort. We had somebody launch a company successfully last year who did all the development work for under $1,000 and is now on the shelf at Walmart.

So they launched a company for $1,000 instead of $50,000. As a result, what’s happened is that you’ve now enabled entrepreneurs to launch companies as part of their disposable income, rather than having to raise angel funds or other things. So now anybody can be an entrepreneur.

What does the cloud mean for innovation?

The ability to manipulate things in virtual space, down to the molecular level so that we can model something without having to risk hundreds of thousands of dollars in time and effort in building and steel, and to do that in a virtual environment literally changes everything. This speed of innovation, the quality of innovation [and] the depth of the innovation that we can do now [is] because of the cloud. The computing power that’s in the cloud far exceeds at multiple dimensions what we’ve ever had. It really does change everything.

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